Coronavirus — EU Presents Largest Ever Recovery Plan

  • "Our unique model built over 70 years is being challenged like never before in our lifetime or in our Union's history," President von der Leyen told EU lawmakers.
  • The largest share of these exceptional funds will be given to Italy and Spain, the countries most affected by the coronavirus pandemic.
  • Last week, Germany and France made a surprising move, proposing a valuable aid plan of €500 billion distributed through an unprecedented debt-sharing mechanism.

European Commission President Ursula von der Leyen presented an exceptional aid plan on Wednesday, valued at €750 billion, to support the European economy affected by the COVID-19 epidemic. The Commission suggested the figure to finance the recovery plan, according to European Commissioner for Economic Affairs, Paolo Gentolini.

Ursula von der Leyen is a German politician and the President of the European Commission since 1 December 2019. She served in the federal government of Germany from 2005 to 2019 as the longest-serving member of Angela Merkel’s cabinet.

“Our unique model built over 70 years is being challenged like never before in our lifetime or in our Union’s history,” President von der Leyen told EU lawmakers. “This is Europe’s moment.” She added, “our willingness to act must live up to the challenges we are all facing.”

This amount is distributed among subsidies with a value of €500 billion, the amount proposed in the Franco-German project for recovery. The rest of the amount will be distributed in the form of loans to member states, according to European sources. If approved, this proposal would constitute the largest recovery plan for European Union history.

“We either all go it alone; leaving countries, regions and people behind, and accepting a Union of haves and have-nots, or we walk that road together,” von der Leyen said. “We take that leap forward. . . For me, the choice is simple. I want us to take a new bold step together.”

Largest Share to Italy and Spain

The largest share of these exceptional funds will be given to Italy and Spain, the countries most affected by the coronavirus pandemic, according to European sources. A document seen by the news sources showed that Italy might get around €173 billion, in the form of grants and loans under the Coronavirus pandemic recovery plan, while Spain will get more than €140 billion.

The document indicated that the European Commission’s proposal was dedicated €8.81 billion for Rome from available grants, and €9.90 billion in loans. Madrid will get €3.77 billion in the form of grants, in addition to loans worth €1.63 billion.

In comparison, Germany, the largest economy in the European Union, will get €8.28 billion in the form of grants. Germany will be among the ten countries that will not get loans. However, the European Union has entitled all 27 member states to apply for a grant.

The aid plan is based on a revised draft of a long-term budget for the European Union, which will be supported by extensive loans issued by the Commission in the name of the European Union, of unprecedented size.

A Difficult Task

As of March 13, 2020, when the number of new cases became greater than those in China, the World Health Organization (WHO) began to consider Europe the active center of the COVID-19 pandemic. As of May 28, there were 1.9 million cases of COVID-19 on the continent and 170,063 deaths.

Last week, Berlin made a surprising move, along with Paris, proposing a valuable aid plan of €500 billion distributed through an unprecedented debt-sharing mechanism. This was a radical change in German principles in this regard. The more strict countries (Netherlands, Austria, Denmark, Sweden) granting support only through loans, while other countries want the support to be through subsidies.

Obtaining the consensus of the European countries regarding the recovery plan mentioned in the European budget will be a difficult task, as the budget itself has not been the subject of consensus among the European Union countries.

Even before the epidemic phase, it had failed in February to approve the budget of €1 trillion, which extends between two years, 2021 and 2027. On the eve of the presentation of the Commission’s plan, Maroc Sivkovic, one of the Commission’s Vice-Presidents, called for a speedy political agreement to be reached during the European summit scheduled for18 June.

Besides the budgetary and advancement mechanism, the European Union has activated the European Stability Mechanism’s €240 billion, which is emergency funds in the Eurozone. €200 billion will be given to companies and €100 billion through the “support to reduce unemployment risks in emergencies” mechanism, to reduce the burden of partial unemployment. Since the crisis began, UNHCR has also approved valuable government aid of €2.13 trillion. The German government has released half of its aid to support its companies.

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Benedict Kasigara

I have been working as a freelance editor/writer since 2006. My specialist subject is film and television having worked for over 10 years from 2005 during which time I was the editor of the BFI Film and Television.

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